U.S. reportedly considering restricting HBM exports to China in blow to Samsung, SK

Industry

U.S. reportedly considering restricting HBM exports to China in blow to Samsung, SK

Published: 01 Aug. 2024, 18:37

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

Flags of China and U.S. are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. [REUTERS/YONHAP]

The U.S. government is considering restricting exports of high bandwidth memory (HBM) chips and related equipment to China, Bloomberg reported Thursday, a measure that could deal a blow to major manufacturers like Samsung Electronics and SK hynix.

The move, which would aim to block China from accessing sophisticated chip technology as well as products related to artificial intelligence, could be enacted as early as next month, although no final decision has been made yet, the report said, citing anonymous sources.

That would impact the sales of Samsung Electronics and SK hynix, two of the three dominant players in the realm of HBM. The last player, Micron Technology, would likely see the lowest impact as it has been under a partial sales ban in the China since last May.

The U.S. foreign direct product rule, which Bloomberg suggested as one possibility, grants Washington the authority to restrict the export of foreign-made products that contain American elements software, designs or manufacturing equipment.

HBM is a premium type of dynamic random access memory essential in the training of AI models. SK hynix is currently the leader in the arena with Samsung and Micron arduously catching up.

Although SK hynix is currently focused on next-generation HBM chips tailored to advanced AI processors that are already banned from being sold in China, it still has large potential opportunity in the Chinese market as an HBM producer.

Samsung Electronics is known to be supplying its HBM3 for Nvidia's less-sophisticated H20 chips, which are exclusively made for the Chinese market.

China is ramping up efforts to secure the technology to manufacture HBM chips on its own but still lags far behind industry leaders.

It is currently focusing on manufacturing HBM2, a technology that SK hynix and Samsung already reached back in 2016.

Samsung Electronics shares closed at 83,100 won Thursday, a 0.95 percent drop from the previous trading day. SK hynix inched down by 0.67 percent.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]